Will Move Its San Francisco HQ to Texas Under Musk?

In December, Elon Musk took Tesla to Texas. Some assume he’ll additionally drag Twitter from San Francisco to the Lone Star State whereas others usually are not so certain.

And shifting a headquarters can imply many issues, the San Francisco Enterprise Occasions reported.

Texas Gov. Greg Abbott wasted no time baiting his hook. And South Dakota Gov. Kristi Noem chummed the waters.

“Carry Twitter to Texas to hitch Tesla, SpaceX & the Boring firm,” Abbot tweeted.

“If Twitter is in want of a brand new HQ, South Dakota is open for enterprise, Noem added.

Twitter, with 7,500 workers worldwide, retains its headquarters in Mid-Market, the place 2,000 or extra labored earlier than the pandemic. Since then, many employees have been distant. Whereas the corporate has a heavy funding in its San Francisco workplace headquarters, it may pull up stakes.

“It could truly be extra stunning if he purchased Twitter and saved the headquarters in California,” web site choice marketing consultant John Boyd, principal of The Boyd Co., instructed the the Enterprise Occasions earlier than Twitter accepted Musk’s buy supply. “Austin wouldn’t be a troublesome promote.”

The corporate leases 880,000 sq. ft in two side-by-side buildings at 1355 Market St, and 1 Tenth Road, from house owners Shorenstein Properties, based mostly within the metropolis, and JpMorgan.

It expanded at 1355 Market this 12 months by 85,000 sq. ft and renewed for 2 flooring. It additionally tried, however failed, to sublease greater than 100,000 sq. ft at 1 Tenth. It’s unclear when its headquarters leases are up. Shorenstein declined to remark to the newspaper.

Final 12 months, Twitter additionally leased 66,000 sq. ft in Downtown Oakland at 1330 Broadway, owned by TMG Properties and KKR. It’s set to open later this 12 months.

Musk may attempt to negotiate a deal to get out of the headquarters lease or try to sublease the area, although San Francisco’s workplace market is presently marked by excessive vacancies.

He may transfer the headquarters and operations out of state – or simply transfer it in identify solely and preserve many operations within the Bay Space.

Musk has hinted at closing the headquarters to avoid wasting money. With greater than $1 billion in income, Twitter is likely to be on the hook for a 2.9 % administrative workplace tax on its San Francisco payroll if half of its payroll expense is tied to HQ capabilities. However some say a transfer is unlikely.

There may be additionally the possibility that Twitter will keep put as a matter of firm tradition at the same time as Musk goals to deliver some modifications.

San Francisco is “a core a part of Twitter and its DNA,” Dan Ives, a Wedbush Securities analyst, stated. “Musk will view that presence as a key asset, not legal responsibility.”

Roger Kay, an analyst with Endpoint Applied sciences Associates, instructed the Austin American-Statesman there’s no motive to maneuver the Twitter headquarters.

“Aside from the truth that Musk is shifting all the pieces he’s obtained (to Austin), there’s no apparent motive to take an organization which is digital, from the very starting, born within the cloud, to create a bodily location,” Kay stated. “They are often wherever and the truth that they’re in San Francisco is primarily due to what the workers have been. That’s the place they have been and that’s the place they obtained the workers.”

[San Francisco Business Times] – Dana Bartholomew